1 / 20

Foreclosure: step-by-step

Foreclosure: step-by-step. CENTS. Foreclosure Warning Signs. Unexpected Life Changes: Loss of employment or change in income Illness/injury Divorce/ seperation Death of a spouse Financial: Changes in mortgage payment Maxed out credit cards Using credit for daily expenses Late payments

roana
Download Presentation

Foreclosure: step-by-step

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Foreclosure:step-by-step CENTS

  2. Foreclosure Warning Signs • Unexpected Life Changes: • Loss of employment or change in income • Illness/injury • Divorce/seperation • Death of a spouse • Financial: • Changes in mortgage payment • Maxed out credit cards • Using credit for daily expenses • Late payments • Minimum payments to credit cards • Opening new lines of credit after maxing out other cards • Choosing which bills/expenses to pay

  3. Mortgage Delinquency: • Mortgage Delinquency: failure to make mortgage payments on time or in full • Late Payment(s) • Collections • Loss Mitigation

  4. Foreclosure Process:*Washington • Foreclosure laws and timelines differ by state • Washington State: • Foreclosure Fairness Act of 2011 (FFA): RCW 61.24 • Judicial v. Non-Judicial foreclosure • Judicial Foreclosure: requires court action to foreclose a home • Non-Judicial Foreclosure: procedure used when a Deed of Trust secures the home loan • Washington has a non-judicial process for the vast majority of home loans • Steps/Stages: Pre-Foreclosure, Notice of Default, Mediation, Notice of Trustee’s Sale, and Trustee Sale

  5. Foreclosure Timeline

  6. Pre-Foreclosure • Pre-Foreclosure occurs after the homeowner has defaulted on a mortgage payment • Notice of Pre-Foreclosure Options (NOPFO): notice to homeowner • Includes right to “meet and confer” • Right to discuss foreclosure alternatives • Homeowner response within 30 days of notice – gives an additional 60 days to meet and confer with servicer or lender • If homeowner does not respond within 30 days, the servicer or lender may send the Notice of Default

  7. Notice of Default • Notice of Default: sent to homeowner if • No resolution during “meet and confer”; or • No response to NOPFO within 30 days • Gives the option to request Mediation • Mediation request must be made through a HUD-certified housing counselor or an attorney • Must be sent 30 days before Notice of Trustee’s Sale can be served or recorded

  8. Mediation: What is it? • What is it? • Face-to-face discussion between homeowner, lender, and neutral 3rd party • Discuss alternatives to foreclosure • Both parties must act in Good Faith • Lender’s rep has authority to modify loan • Mediator has been provided with all necessary documentation by parties • Mediation fee has been paid ($400 – each party pays $200) • Homeowner or authorized rep attends mediation • Lender may not proceed with foreclosure until mediation has concluded

  9. Mediation Documentation • The mediator will specify the required documentation • Homeowner will typically need to provide: • Most recent paystubs • Documentation of debts and other obligations • 2 years of tax returns • Lender will typically need to provide: • Note and Deed of Trust • Proof of ownership of Note • Loan balance • List of fees and charges • Payment history • Present value of home and other loan modification information

  10. Mediation Timeline • May be requested from time Notice of Default is received, up to 20 days after Notice of Trustee Sale was recorded • Department of Commerce (DOC) notifies parties mediation was requested within 10 days of request • Mediation fee must be paid within 30 days of DOC’s notice • Homeowner documentation sent to lender and mediator within 23 days of DOC notice • Lender documentation sent to homeowner and mediator within 20 days of receipt of homeowner’s documentation • Mediation is within 70 days of mediator selection (DOC selects) • Mediation date/time is set 30 days prior to mediation • Mediation session runs 1-3 hours

  11. Post-Mediation • Mediator issues certificate of results and good faith within 7 days post mediation • If an agreement is NOT reached: • Upon issuance of mediator’s certificate or 17 days post-mediation, the lender may proceed with foreclosure • If an agreement is reached: • Foreclosure is avoided

  12. Per se Consumer Protection Act violations • What if the lender does not act in good faith during mediation? • Not-in-good-faith mediation certificate • Per se Consumer Protection Act violation: the homeowner may sue to enjoin (stop) the Trustee Sale.

  13. Notice of Trustee’s Sale • Must be recorded by the trustee at least 120 days prior to sale • Must be recorded in the county where the property is located • Trustee must provide notice (service or posting) at least 90 days prior to sale • Must be published 2 times • 1st Publication: between 28-35 days prior to sale • 2nd Publication: between 7-14 days prior to sale

  14. Trustee Sale • Trustee Sale: the auction of the property • Must occur on a Friday or if Friday is a legal holiday, the sale will occur on the following Monday.

  15. What’s the best option for you? • Stay in your home? • Communicate with your servicer/lender to discuss options • Seek mortgage assistance www.makinghomeaffordable.gov • Mediation • Bankruptcy • Leave the home? • Sell • Work-out: Short Sale or Deed in Leiu • Assumption • Allow the home to foreclose

  16. Protections & Consequences • Mediation process in Washington provides borrowers at risk of foreclosure with: • More notice, time, and options • Consumer Financial Protection Bureau (CFPB): federal agency tasked with implementing reforms to the mortgage servicing industry • Restricted Dual Tracking • Notification • Access to servicing personnel • Fair review process • No foreclosure until alternatives are considered • Taxes: *Mortgage Forgiveness Debt Relief Act (applies to cancelled debt 2007-2013) • cancelled debt does not have to be claimed as taxable income – up to $2 million • Negative impact on Credit Score: • Delinquency, short sale, deed-in-lieu, & foreclosure

  17. Common Mistakes • Ignoring calls/letters from your servicer or lender • Throwing away correspondence from your servicer or lender • Not seeking out a HUD-certified housing counselor • Falling victim to scams

  18. Best Practices • Keep lines of communication open with your servicer/lender • Open and read any letters • Keep all notices and correspondence (including the envelope) • Work with a HUD-certified housing counselor • Know the warning signs of a scam: if you suspect a scam – report it! • A housing counselor requiring a fee • Claims of a “special relationship” with servicers/lenders • Guarantees to resolve foreclosure issues • Discouraging communication with your servicer/lender • High pressure tactics to sign paperwork, sell property, transfer ownership • Advises to direct mortgage payment to the housing counseling business

  19. Resources • www.makinghomeaffordable.gov • 1-888-995-HOPE (4673) • Washington Homeownership Center • www.homeownership.wa.gov • 1.877.894.HOME (4663)

  20. Questions?

More Related